Floating in Wine's Sweet Spot

By

Lettie Teague

Sept. 27, 2012 9:50 p.m. ET

"The market is flooded with wine distributors and wines, but we're building a Noah's Ark," said Steve Doran, head of sales and one of the four founding partners of Verity Wines, a Manhattan-based wine distributor. The image is dramatic, if a touch histrionic: After all, Verity, less than 4 years old, is already one of the most successful wine distributors in New York.

Mr. Doran's somewhat theatrical words can be explained by the many changes—and challenges—he and his partners have seen in the wine business over the years. Mr. Doran for many years worked at Lauber Imports, a medium-size wine company, until it was purchased by corporate behemoth Southern Wine & Spirits. Verity's CEO, Bill Sciambi, was a longtime Lauber employee as well, and the director of brands, Chris Desor, and the COO, Constance Oehmler, also formerly worked at other small wine companies.

I met with the four Verity partners a few weeks ago at the company's office in lower Midtown. Because the conference room was filled with Verity salespeople, the five of us crammed together in a small corner at the back of the room, surrounded by bottles. It was an appropriately unpretentious setting for such a seemingly unpretentious and good-humored group. Indeed, one of the requirements for employment at Verity is "a sense of humor" and "an ability to laugh at yourself," according to Mr. Doran. (Presumably a bit of wine knowledge is also a help.)

Verity is one of most recent additions to a group of small to medium-size New York wine distributors whose portfolios are heavily weighted toward high-profile, high-quality, family-run wineries. Its industry peers include Martin Scott, Polaner, Winebow and Michael Skurnik, though all of these companies were founded many years before Verity.

Size is an important factor in a distributor's success, said Mr. Sciambi, who noted that there are plenty of wine companies much smaller than Verity—many of which are struggling. "There's a sweet spot—you have to have a big enough book but not too big, so that you can maintain relationships with your suppliers," he said.

"Book" is the industry word for a company's portfolio of wineries, and the suppliers are the wineries themselves. Verity's book of 350 or so wineries includes some of the top names in the world, such as Au Bon Climat, Beaucastel and Champagne Salon. It also includes the portfolios of top importers such as Eric Solomon and companies like Robert Haas. The partners are not necessarily looking to add to their book: "We turn down 12 wineries for every winery we take an appointment with," said Mr. Sciambi. But he said it works the other way, too, when it comes to courting a potential addition to their book: "Unless you have a relationship, you're not going to get someone on the phone."

And they're definitely not looking to cannibalize the wines they already have—something the partners say the large distributors will often do. As Mr. Sciambi put it: "We don't want to have three Pinot Noirs all at the same price point." And Verity hasn't followed other distributors in creating an eponymous brand in an effort to increase revenue. "We have two major Spanish suppliers—we would never consider importing a Spanish wine of our own," said Mr. Sciambi.

Verity currently has 27 salespeople on staff and more than half of them are based in New York City—that's where the company does most of its business, though its website proclaims that the Verity reach extends "from Montauk to Buffalo." The East Village and Brooklyn have been its areas of biggest growth. As Mr. Doran put it, "Brooklyn has been on fire for the past six or seven years."

And what wines were on fire? Were there particular countries posed for a breakout—or perhaps a comeback? The partners had differing points of view. Mr. Doran said he thought it was Argentina and New Zealand, while Mr. Desor said California was "coming back very strongly—especially Anderson Valley and Santa Barbara."

Mr. Sciambi agreed and suggested that California winemakers had finally figured out "where certain varietals do best." Ms. Oehmler said she thought wine drinkers would be seeing "a lot less private-label Pinot Noir." Hers was the only prediction I had trouble believing. Would there actually be less Pinot around? It's a grape that Americans seem to love, after all. On the other hand, because the Verity partners have been right about so much, perhaps I'll check back on their Pinot sales over the next several months.

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